First, a technical note - my "fill" on these SPY 114 Oct calls was horrendous; straight out of a Friday the 13th movie. The price I received should have been somewhere near $1.70ish but instead it was $1.89... that is roughly a 11% haircut. I am none too happy about it.
That said, the trade worked out perfectly in terms of strategy - my intent was buying in S&P 1133-1134 area and looking for 10 to 15 points. Just over an hour later my trade is "done". Please note I don't care about time frames - to outsiders this is a "daytrade". Not to me; it was a price target... if it took 4 days, 4 hours or 4 minutes my goal was those 10 to 15 points. (if I was talking a stock I'd say if it took 4 months, 4 weeks, 4 days or 4 hours but since its an option, due to volatility risk, I usually hold them for hours or at most days)
I'll be taking off my trade in the next few minutes with a nice gain of about 33 cents per option contract (roughly $1.89 to $2.22) That is 17% for maybe 75 minutes of work. It should have been closer to 30% if my entry point was anywhere near what it should have been. Can't do much about it.
p.s. today was a POMO day - I am sure it was just happenstance we shook off a horrid consumer confidence number and rallied just as the Fed was infusing the primary dealers with hundreds of millions. (indeed today was a small POMO day, usually they send in $3-$5B, today was less than a billion)
No position
x
Tuesday, September 28, 2010
Bookkeeping: Selling SPY Calls
Posted by
Mark
at
11:45 AM
Bookkeeping: Selling SPY Calls
2010-09-28T11:45:00-04:00
Mark
| Edit This Post |
Create A New Post
Bookkeeping: Selling SPY Calls
2010-09-28T11:45:00-04:00
Mark
Subscribe
Archives By Date
Best Of FMMF
- Blogroll
- 1: Warren Buffet Piles on Europe
- 2: [Video] Jim Chanos Returns from Europe, Even More Bearish on China
- 3: A Chart to Open Our Eyes - Staggering Changes by Multinationals in Employment Behavior 00s vs 90s
- 4: Futures Blasted on Dexia Woes... and Poor Preliminary China Data
- 5: Market Working to Worst Thanksgiving Since 1932
- 6: Et Tu, German Bonds? Poor Auction Raises Eyebrows